Awakened beast in Germany: Select stocks predicted to generating higher-than-average profits
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The latest issue of Börse ONLINE has highlighted five German stocks expected to benefit from China's economic stimulus package, although the exact names of these stocks are not explicitly listed. The article suggests that typical beneficiaries would include major DAX-listed firms involved in industrial equipment and machinery manufacturing, automotive parts suppliers, chemical and materials producers linked to construction and infrastructure, companies specialising in climate-neutral technologies and infrastructure, and large banking-related firms or financial institutions involved in international operations.
According to the article, China's stimulus package, the largest since the COVID-19 pandemic, is a first step towards addressing the structural problems in the Chinese economy. The Chinese stock market has been revitalized after years of stagnation, with the Hang Seng Index and the CSI 300 seeing notable gains in the past 30 days. However, trust with foreign investors has been eroded in recent years in China.
For investors seeking to benefit from the Chinese economic recovery without direct exposure to Chinese securities, the German stock market offers quality stocks that benefit from the Chinese boom. Approximately 50% of Infineon's revenue comes from automotive chips, making it a significant player in the Chinese market. Infineon's CEO, Jochen Hanebeck, spoke of a "strong momentum" in China in May, and the stimulus and ambitious expansion plans of Chinese automakers are expected to further strengthen Infineon's position in China.
However, Infineon had to adjust its forecast for the recently completed fiscal year downwards twice in a row within a few months. Christopher Broadley, a portfolio manager at Insight Investment, anticipates increased volatility in the coming weeks.
Börse ONLINE offers a promotional subscription for 3x the current issue for only 9.90 euros instead of 17.40 euros. Joining the promotional subscription provides access to well-founded industry analyses and hot stock tips in the future. The current issue of Börse ONLINE provides insights into which German companies benefit from the China boom, and readers can access the list of these five German top favorites in the promotional subscription. Other German companies may also benefit from the China boom, as mentioned in the current issue of Börse ONLINE, but the article does not provide specific details about these companies.
The German government's "Special Fund for Infrastructure and Climate Neutrality" and the €631 billion "Made for Germany" investment plan indicate strong support for companies involved in infrastructure, climate technology, and industrial innovation. Defensive sectors like utilities and healthcare are also noted to thrive due to ECB monetary easing, but export and manufacturing sectors face tariff pressures—yet could still gain from boosted Chinese infrastructure demand.
In conclusion, the Chinese economic stimulus package offers opportunities for German companies, particularly those involved in infrastructure, manufacturing, and related supply chains, climate-neutral technologies, and international finance. For investors interested in these sectors, the German stock market presents quality stocks that could benefit from the Chinese economic recovery.
- Given the discussions in the latest Börse ONLINE issue, investors looking for opportunities outside of Chinese securities can consider investing in German banks or financial institutions involved in international operations, as these may benefit from China's economic recovery.
- Infineon, a German company with significant revenue from automotive chips, is expected to further strengthen its position in China due to the stimulus and ambitious expansion plans of Chinese automakers, despite some concerns about increased volatility and adjustments to its forecast.
